Taxation (Budget Measures) Act 2024
Taxation (Budget Measures) Act 2024
Public Act |
2024 No 19 |
|
Date of assent |
4 June 2024 |
|
Commencement |
see section 2 |
Contents
The Parliament of New Zealand enacts as follows:
1 Title
This Act is the Taxation (Budget Measures) Act 2024.
2 Commencement
(1)
This Act comes into force on the day after the date on which it receives the Royal assent, except as provided in this section.
(2)
Part 1 comes into force on 1 April 2024.
(3)
Part 2 comes into force on 1 July 2024.
(4)
Part 3 comes into force on 31 July 2024.
(5)
Part 4 comes into force on 1 April 2025.
(6)
Sections 41, 42, and 43 come into force on 1 April 2021.
(7)
Section 44(2) comes into force on 1 April 2025.
(8)
Section 44(3) comes into force on 1 April 2030.
Part 1 Income Tax Act 2007 amendments commencing 1 April 2024
3 Income Tax Act 2007 amended
This Part amends the Income Tax Act 2007.
4 New sections LC 14 and LC 15 inserted
After section LC 13, insert:
LC 14 Amount of tax credit for independent earners for 1 April 2024 to 30 July 2024
When this section applies
(1)
This section applies for calculating the amount of a tax credit under section LC 13 for the period starting on 1 April 2024 and finishing on 30 July 2024.
Amount of credit formula: section LC 13(2)
(2)
The tax credit for a person under section LC 13 is calculated using the formula—
(person’s credit − full year abatement) × credit period days ÷ 365.
Definition of items in formula
(3)
The items in the formula are defined in subsections (4) to (6).
Person’s credit
(4)
Person’s credit is, if the person’s net income for the tax year is equal to or more than $24,000, $520. Otherwise it is zero.
Full year abatement
(5)
Full year abatement is, if the person’s net income is greater than $44,000 for the tax year, 13 cents for each complete dollar of the excess.
Credit period days
(6)
Credit period days is the number of whole days in the credit period.
Defined in this Act: amount, net income, tax credit, tax year
LC 15 Amount of tax credit for independent earners for 31 July 2024 to 31 March 2025
When this section applies
(1)
This section applies for calculating the amount of a tax credit under section LC 13 for the period starting on 31 July 2024 and finishing on 31 March 2025.
Amount of credit formula: section LC 13(2)
(2)
The tax credit for a person under section LC 13 is calculated using the formula—
(person’s credit − full year abatement) × credit period days ÷ 365.
Definition of items in formula
(3)
The items in the formula are defined in subsections (4) to (6).
Person’s credit
(4)
Person’s credit is, if the person’s net income for the tax year is equal to or more than $24,000, $520. Otherwise it is zero.
Full year abatement
(5)
Full year abatement is, if the person’s net income is greater than $66,000 for the tax year, 13 cents for each complete dollar of the excess.
Credit period days
(6)
Credit period days is the number of whole days in the credit period.
Defined in this Act: amount, net income, tax credit, tax year
5 New sections MF 4J and MF 4K inserted
After section MF 4I, insert:
MF 4J Calculation of instalments: 1 April 2024 to 30 July 2024
When this section applies
(1)
This section applies for calculating the amount of an instalment by way of tax credit under section MD 1 (Abating WFF tax credit) or, as applicable, sections MD 1 and ME 1 (Minimum family tax credit) for the period starting on 1 April 2024 and finishing on 30 July 2024.
In-work tax credit formula: section MD 10
(2)
The instalments for the relevant tax credit are calculated using, for the calculation of the in-work tax credit, the formula—
(amount A + amount B × (children − 3)) × weekly periods ÷ 52.
Definition of items in formula
(3)
In the formula in subsection (2),—
(a)
amount A is $3,770:
(b)
amount B is $780:
(c)
children is the greater of—
(i)
3; and
(ii)
the number of children for whom the person is allowed the in-work tax credit:
(d)
weekly periods,—
(i)
for 2 or more entitlement periods forming 1 continuous period, is the number of whole periods of 1 week in the continuous period for which the person or their spouse, civil union partner, or de facto partner has, from the work activity, income to which section MD 9(2) (Fifth requirement: earner) refers or is an earner described in section MD 9(1)(b), and includes whole periods of 1 week to which the alternative requirement in section MD 9(6) applies:
(ii)
for an entitlement period to which subparagraph (i) does not apply, is the number of whole periods of 1 week in the entitlement period for which the person or their spouse, civil union partner, or de facto partner has, from the work activity, income to which section MD 9(2) refers or is an earner described in section MD 9(1)(b), and includes whole periods of 1 week to which the alternative requirement in section MD 9(6) applies.
Minimum family tax credit formula: section ME 1
(4)
The instalments for the relevant tax credit are calculated using, for the calculation of the minimum family tax credit, the formula—
(prescribed amount − net family scheme income) × weekly periods ÷ 52.
Definition of items in formula
(5)
In the formula in subsection (4),—
(a)
prescribed amount is $35,204:
(b)
net family scheme income is the net family scheme income, calculated using the formula in section ME 3 (Meaning of net family scheme income), for a relationship period containing the entitlement period, of—
(i)
the person; or
(ii)
their spouse, civil union partner, or de facto partner; or
(iii)
the person and their spouse, civil union partner, or de facto partner:
(c)
weekly periods is the number of periods of 1 week in the entitlement period for which the person is a full-time earner.
Defined in this Act: amount, child, civil union partner, de facto partner, earner, entitlement period, full-time earner, in-work tax credit, minimum family tax credit, net family scheme income, relationship period, spouse, tax credit
MF 4K Calculation of instalments: 31 July 2024 to 31 March 2025
When this section applies
(1)
This section applies for calculating the amount of an instalment by way of tax credit under section MD 1 (Abating WFF tax credit) or, as applicable, sections MD 1 and ME 1 (Minimum family tax credit) for the period starting on 31 July 2024 and finishing on 31 March 2025.
In-work tax credit formula: section MD 10
(2)
The instalments for the relevant tax credit are calculated using, for the calculation of the in-work tax credit, the formula—
(amount A + amount B × (children − 3)) × weekly periods ÷ 52.
Definition of items in formula
(3)
In the formula in subsection (2),—
(a)
amount A is $5,070:
(b)
amount B is $780:
(c)
children is the greater of—
(i)
3; and
(ii)
the number of children for whom the person is allowed the in-work tax credit:
(d)
weekly periods,—
(i)
for 2 or more entitlement periods forming 1 continuous period, is the number of whole periods of 1 week in the continuous period for which the person or their spouse, civil union partner, or de facto partner has, from the work activity, income to which section MD 9(2) (Fifth requirement: earner) refers or is an earner described in section MD 9(1)(b), and includes whole periods of 1 week to which the alternative requirement in section MD 9(6) applies:
(ii)
for an entitlement period to which subparagraph (i) does not apply, is the number of whole periods of 1 week in the entitlement period for which the person or their spouse, civil union partner, or de facto partner has, from the work activity, income to which section MD 9(2) refers or is an earner described in section MD 9(1)(b), and includes whole periods of 1 week to which the alternative requirement in section MD 9(6) applies.
Minimum family tax credit formula: section ME 1
(4)
The instalments for the relevant tax credit are calculated using, for the calculation of the minimum family tax credit, the formula—
(prescribed amount − net family scheme income) × weekly periods ÷ 52.
Definition of items in formula
(5)
In the formula in subsection (4),—
(a)
prescribed amount is $35,316:
(b)
net family scheme income is the net family scheme income, calculated using the formula in section ME 3 (Meaning of net family scheme income), for a relationship period containing the entitlement period, of—
(i)
the person; or
(ii)
their spouse, civil union partner, or de facto partner; or
(iii)
the person and their spouse, civil union partner, or de facto partner:
(c)
weekly periods is the number of periods of 1 week in the entitlement period for which the person is a full-time earner.
Defined in this Act: amount, child, civil union partner, de facto partner, earner, entitlement period, full-time earner, in-work tax credit, minimum family tax credit, net family scheme income, relationship period, spouse, tax credit
6 Section RD 50 amended (Employer’s liability for attributed benefits)
(1)
Replace section RD 50(2) and (3) with:
Tax liability
(2)
The employer’s FBT liability in relation to the employee is the amount calculated using the formula—
tax on all-inclusive pay − FBT on net cash pay.
Definition of items in formula in subsection (2)
(3)
In the formula in subsection (2),—
(a)
tax on all-inclusive pay is the amount determined at the rate set out in schedule 1, part C, table 1 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits) on the amount of the employee’s all-inclusive pay calculated using the formula in section RD 51(2):
(b)
FBT on net cash pay is the amount determined at the rate set out in schedule 1, part C, table 1 on the amount of the employee’s net cash pay calculated using the formula in subsection (3B).
Net cash pay
(3B)
For the purposes of subsection (3)(b), the employee’s net cash pay is the amount calculated using the formula—
cash pay − tax on cash pay.
Definition of items in formula in subsection (3B)
(3C)
In the formula in subsection (3B),—
(a)
cash pay is the amount calculated under section RD 51(3)(a) or (4)(a):
(b)
tax on cash pay is the amount calculated under section RD 51(3)(b) or (4)(b).
(2)
Subsection (1) applies for the 2024–25 and later income years.
7 Schedule 1 amended (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits)
(1)
Replace schedule 1, part A, table 1 with:
Table 1
| Row | Range of dollar in taxable income | Tax rate |
|---|---|---|
| 1 | $0 – $14,000 | 0.1050 |
| 2 | $14,001 – $15,600 | 0.1282 |
| 3 | $15,601 – $48,000 | 0.1750 |
| 4 | $48,001 – $53,500 | 0.2164 |
| 5 | $53,501 – $70,000 | 0.3000 |
| 6 | $70,001 – $78,100 | 0.3099 |
| 7 | $78,101 – $180,000 | 0.3300 |
| 8 | $180,001 upwards | 0.3900 |
| How to use this table: | ||
| Find the range in the second column for each dollar in the person’s taxable income, and apply the relevant rate for the dollar in the third column. | ||
(2)
In schedule 1, part C, table 1, the heading to column 2, replace “all-inclusive pay”
with “pay”
.
(3)
In schedule 1, part C, table 1, “How to use this table:”, replace “all-inclusive pay under section RD 51”
with “pay”
.
(4)
Subsection (1) applies for the 2024–25 income year.
(5)
Subsections (2) and (3) apply for the 2024–25 and later income years.
Part 2 Income Tax Act 2007 and Tax Administration Act 1994 amendments commencing 1 July 2024
Income Tax Act 2007
8 Income Tax Act 2007 amended
Sections 9 to 16 amend the Income Tax Act 2007.
9 New cross-heading and section GB 44B inserted
After section GB 44, insert:
Arrangements involving FamilyBoost tax credits
GB 44B Arrangements involving FamilyBoost tax credits
When this section applies
(1)
This section applies when—
(a)
a person enters into an arrangement; and
(b)
the arrangement has a purpose or effect of defeating the intent and application of subpart MH (FamilyBoost tax credits).
Credit reduced
(2)
A tax credit under subpart MH is reduced to the amount the Commissioner considers would have arisen had the arrangement not occurred.
Defined in this Act: amount, arrangement, Commissioner, tax credit
10 Section LA 7 amended (Remaining refundable credits: tax credits for social policy and other initiatives)
After section LA 7(1)(a), insert:
(aba)
section LB 4BA (Tax credits for early childhood education):
11 New section LB 4BA inserted (Tax credits for early childhood education)
After section LB 4, insert:
LB 4BA Tax credits for early childhood education
A person has a tax credit equal to the amount of their FamilyBoost tax credit under subpart MH (FamilyBoost tax credits).
Defined in this Act: amount, FamilyBoost tax credit, tax credit
12 Section MA 1 amended (What this Part does)
After section MA 1(a), insert:
(ab)
under the FamilyBoost tax credits scheme, see subpart MH (FamilyBoost tax credits):
13 Section MA 6 amended (Avoidance arrangements)
(1)
After the section heading in section MA 6, insert “Arrangements involving tax credits for families”
.
(2)
In section MA 6, insert as subsection (2):
Arrangements involving FamilyBoost tax credits
(2)
Section GB 44B (Arrangements involving FamilyBoost tax credits) may apply to reduce a tax credit under subpart MH (FamilyBoost tax credits).
14 New subpart MH inserted (FamilyBoost tax credits)
After subpart MG, insert:
Subpart MH—FamilyBoost tax credits
MH 1 FamilyBoost tax credits: purpose
The purpose of the FamilyBoost tax credit is to provide financial assistance to caregivers with early childhood education costs.
Defined in this Act: caregiver, FamilyBoost tax credit
MH 2 Some definitions
In this subpart,—
abatement amount means the amount calculated under section MH 5
caregiver means a person, whether or not a parent of the child, who the Commissioner considers has responsibility for the day-to-day care of a child, other than on a temporary basis
FamilyBoost tax credit means a tax credit under section MH 3
licensed early childhood service has the meaning set out in section 10 of the Education and Training Act 2020
licensed early childhood service fees includes optional charges but excludes any portion that is a donation
tax credit income means the amount determined under section MH 4.
Defined in this Act: abatement amount, amount, caregiver, Commissioner, FamilyBoost tax credit, licensed early childhood service, licensed early childhood service fees, tax credit, tax credit income
MH 3 FamilyBoost tax credit
Entitlement to FamilyBoost tax credit
(1)
A natural person is entitled to a tax credit, the FamilyBoost tax credit, for a quarter for the amount calculated under subsections (2) and (3) if, during that quarter, the person—
(a)
is a caregiver of one or more children enrolled with a licensed early childhood service; and
(b)
incurs licensed early childhood service fees for that child or children; and
(c)
is resident in New Zealand.
Amount of credit
(2)
Subject to subsection (3), the FamilyBoost tax credit for the quarter is equal to 25% of the licensed early childhood service fees payable by the person for the quarter up to a maximum credit amount of $975.
Abatement of credit
(3)
If the person’s tax credit income for the quarter is greater than $35,000, the FamilyBoost tax credit for the quarter is the lesser of—
(a)
the amount of the FamilyBoost tax credit determined under subsection (2); and
(b)
$975 less the abatement amount.
Person may apply for refund
(4)
A person entitled to a FamilyBoost tax credit for a quarter may apply for a refund of that credit under section 41C of the Tax Administration Act 1994 if—
(a)
the person has met their obligation to file a return of income by the dates set out in section 37 of the Tax Administration Act 1994; and
(b)
the person’s spouse, civil union partner, or de facto partner (partner), if applicable, has also met their obligation to file a return of income by the dates set out in section 37 of the Tax Administration Act 1994.
One tax credit per couple
(5)
If a person entitled to a FamilyBoost tax credit under subsection (1) has a partner, that partner is not also entitled to a FamilyBoost tax credit for the quarter, regardless of whether the licensed early childhood service fees are incurred by both the person and their partner.
Deceased estate
(6)
Despite subsection (4), where a person entitled to a FamilyBoost tax credit dies before applying for a refund of that credit, the trustee of that person’s estate may apply for a refund of the FamilyBoost tax credit to which the deceased person was entitled under subsection (1) as if they were that person.
Separated persons
(7)
Subsection (5) does not apply for a quarter if the person is separated from their partner and does not have a new partner at the end of the quarter.
Defined in this Act: abatement amount, caregiver, de facto partner, FamilyBoost tax credit, licensed early childhood service, licensed early childhood service fees, natural person, pay, quarter, resident in New Zealand, return of income, tax credit income, trustee
MH 4 Meaning of tax credit income
Meaning of tax credit income
(1)
The tax credit income of a person entitled to a FamilyBoost tax credit for a quarter under section MH 3 is the amount determined under subsections (2) to (6).
Reportable income
(2)
Subject to subsection (4), if the person derives reportable income in the quarter, the person’s tax credit income for the quarter is the amount of that reportable income.
Other income
(3)
Subject to subsection (4), if the person derives taxable income other than reportable income in the quarter, the amount treated as the person’s tax credit income for the quarter is,—
(a)
if a return of income has been filed by the person for the income year that includes the quarter, 25% of the amount of the person’s taxable income for that income year; or
(b)
in any other case, 25% of the amount of the person’s taxable income for the income year for which the most recent return of income has been filed by the person before the commencement of the quarter.
Reportable and other income
(4)
If the person derives both reportable income and taxable income other than reportable income in the quarter, the person’s tax credit income for the quarter is the greater of—
(a)
the person’s reportable income in the quarter; and
(b)
the amount treated as the person’s tax credit income for the quarter under subsection (3).
Combined tax credit incomes
(5)
If the person has a spouse, civil union partner, or de facto partner (partner) for the quarter, the person’s tax credit income for the quarter is the combined total of the person’s tax credit income and the tax credit income of their partner for the quarter. For these purposes, their partner’s tax credit income is determined under subsections (2) to (4) as if their partner were the person referred to in those subsections.
Separated persons
(6)
Subsection (5) does not apply for a quarter if the person is separated from their partner and does not have a new partner at the end of that quarter.
Defined in this Act: de facto partner, FamilyBoost tax credit, income year, quarter, reportable income, return of income, tax credit income, taxable income
MH 5 FamilyBoost tax credit abatement
What this section does
(1)
When a person is entitled to a FamilyBoost tax credit for a quarter under section MH 3 and the person’s tax credit income for the quarter is greater than $35,000, this section calculates the abatement amount for the purposes of section MH 3(3)(b).
Rate of abatement
(2)
Subject to subsection (3), the abatement amount is calculated at the rate of 9.75 cents for each complete dollar of the person’s tax credit income for the quarter that is greater than $35,000.
Zero credit
(3)
If the person’s tax credit income for the quarter is $45,000 or more, the abatement amount is $975 and the FamilyBoost tax credit amount under section MH 3(2) and (3) is zero.
Defined in this Act: abatement amount, amount, FamilyBoost tax credit, quarter, tax credit income
15 Section RM 10 amended (Using refund to satisfy tax liability)
(1)
After section RM 10(4), insert:
FamilyBoost tax credit
(5)
Despite subsections (2) to (4), if a person has a FamilyBoost tax credit under subpart MH (FamilyBoost tax credits) and is entitled to a refund under section 41C of the Tax Administration Act 1994,—
(a)
the Commissioner may apply the amount of the refund to satisfy a liability that the person has under section 41C(7) of that Act:
(b)
if paragraph (a) does not apply or an amount remains after the Commissioner has exercised the discretion given under paragraph (a), the person may ask under section 173L of that Act for the Commissioner to apply some, or all, of the amount on a particular date to satisfy a liability under the Inland Revenue Acts.
(2)
In section RM 10, list of defined terms, insert “FamilyBoost tax credit”
.
16 Section YA 1 amended (Definitions)
(1)
This section amends section YA 1.
(2)
Insert, in appropriate alphabetical order:
abatement amount is defined in section MH 2 (Some definitions) for the purposes of subpart MH (FamilyBoost tax credits)
(3)
Insert, in appropriate alphabetical order:
caregiver is defined in section MH 2 (Some definitions) for the purposes of subpart MH (FamilyBoost tax credits)
(4)
Insert, in appropriate alphabetical order:
FamilyBoost tax credit is defined in section MH 2 (Some definitions) for the purposes of subpart MH (FamilyBoost tax credits)
(5)
Insert, in appropriate alphabetical order:
licensed early childhood service is defined in section MH 2 (Some definitions) for the purposes of subpart MH (FamilyBoost tax credits)
(6)
Insert, in appropriate alphabetical order:
licensed early childhood service fees is defined in section MH 2 (Some definitions) for the purposes of subpart MH (FamilyBoost tax credits)
(7)
Insert, in appropriate alphabetical order:
tax credit income is defined in section MH 2 (Some definitions) for the purposes of subpart MH (FamilyBoost tax credits)
Tax Administration Act 1994
17 Tax Administration Act 1994 amended
Sections 18 to 24 amend the Tax Administration Act 1994.
18 New section 41C inserted (Application for refund of FamilyBoost tax credit)
After section 41B, insert:
41C Application for refund of FamilyBoost tax credit
(1)
This section applies to a person who is entitled to apply for a refund of a FamilyBoost tax credit for a quarter under subpart MH of the Income Tax Act 2007.
(2)
The person may apply for a refund of the amount of the FamilyBoost tax credit for the quarter calculated under subpart MH.
(3)
A person applying for a refund must complete an application—
(a)
in the manner specified by the Commissioner; and
(b)
accompanied by the information required by the Commissioner.
(4)
A refund paid under this section must be paid as if it were tax paid in excess.
(5)
If an incorrect amount is paid for a refund under this section, the refund must be treated as if it were correctly calculated under subpart MH and the Commissioner must not take any corrective action unless—
(a)
the amount of the refund is a significant overpayment or significant underpayment of the correct amount as calculated under subpart MH; or
(b)
the refund has been paid as a result of the person knowingly providing altered, false, incomplete, or misleading information.
(6)
For the purposes of subsection (5),—
(a)
the Commissioner may determine the thresholds for what is a significant overpayment or a significant underpayment of an amount of a refund; and
(b)
any exercise of the Commissioner’s discretion under paragraph (a) must be—
(i)
carried out having regard to the resources available to the Commissioner; and
(ii)
published by the Commissioner on an internet site administered by the Commissioner.
(7)
If the Commissioner considers the amount of a FamilyBoost tax credit refunded to a person is a significant overpayment, the Commissioner may recover the overpayment as if it were income tax payable by the person.
(8)
If a person notifies the Commissioner of a change in their circumstances, the Commissioner may reconsider their refund if the Commissioner considers the person’s change in circumstances has resulted in an unduly harsh outcome with regard to the person’s refund.
(9)
A person who is entitled to a refund of a FamilyBoost tax credit must apply for the refund within the 4-year period that begins on the day immediately following the end of the quarter for which the person was entitled to the tax credit under subpart MH.
(10)
The Commissioner must not issue a refund if more than 4 years have passed since the end of the quarter for which a person was entitled to the FamilyBoost tax credit under subpart MH.
19 Section 157 amended (Deduction of tax from payments due to defaulters)
In section 157(10), definition of income tax, after paragraph (l), insert:
(m)
an amount of a significant overpayment of a FamilyBoost tax credit refund under section 41C(7)
20 Section 165A amended (Recovery of excess tax credits allowed)
In section 165A(2), after “subject to”
, insert “section 41C(5) to (7) of this Act and”
.
21 Section 173L amended (Transfer of excess tax within taxpayer’s accounts)
After section 173L(2)(bb), insert:
(bc)
in the case of a FamilyBoost tax credit, a day after the end of the quarter to which the credit relates:
22 Section 184A amended (Refund of tax paid in excess made by direct credit to bank account)
After section 184A(5)(b), insert:
(bb)
a refund allowed under section 41C:
23 Section 185 amended (Payment out of Crown Bank Account)
After section 185(1)(e), insert:
(eb)
by way of credits of tax under subpart MH of the Income Tax Act 2007; or
24 Schedule 7 amended (Disclosure rules)
In schedule 7, part C, subpart 2, after clause 46, insert:
46B Department of Education: FamilyBoost tax credit
(1)
Section 18 does not prevent the Commissioner communicating information to a person who is an officer or employee of the department for the time being responsible for the administration of the Education and Training Act 2020 (the Ministry of Education), being information reasonably necessary for the Commissioner’s administration of the FamilyBoost tax credit, including—
(a)
identification of a child enrolled in an early childhood education and care service, including their national student number:
(b)
a child’s address:
(c)
a child’s enrolment status:
(d)
a child’s date of birth:
(e)
a child’s caregivers.
(2)
Despite anything to the contrary in the Education and Training Act 2020, for the purpose of administering the FamilyBoost tax credit,—
(a)
the chief executive of the Ministry of Education must supply to the Commissioner information, described in subclause (1), that the Ministry of Education holds and that is requested by the Commissioner:
(b)
the Commissioner may gather, receive, use, store, and disclose information, described in subclause (1), subject to the Commissioner’s duties, powers, and functions under the Tax Administration Act 1994, including comparing that information with information held by the Commissioner that relates to an application for a refund of a FamilyBoost tax credit under section 41C.
Part 3 Income Tax Act 2007 and Tax Administration Act 1994 amendments commencing 31 July 2024
Income Tax Act 2007
25 Income Tax Act 2007 amended
Sections 26 to 29 amend the Income Tax Act 2007.
26 Section LC 13 amended (Tax credits for independent earners)
In section LC 13(5), replace “$44,000”
with “$66,000”
.
27 Section MD 10 amended (Calculation of in-work tax credit)
In section MD 10(3)(a), replace “$3,770”
with “$5,070”
.
28 Section ME 1 amended (Minimum family tax credit)
In section ME 1(3)(a), replace “$35,204”
with “$35,316”
.
29 Schedule 1 amended (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits)
In schedule 1, part D, clause 3, table 2, row 7, paragraph (c), replace “$14,000”
with “$15,600”
.
Tax Administration Act 1994
30 Tax Administration Act 1994 amended
Sections 31 and 32 amend the Tax Administration Act 1994.
31 Schedule 5 amended (Certain tax codes and rates)
(1)
In schedule 5, part A, clause 4, tax code table, row 3, column 3, replace “$14,000”
with “$15,600”
.
(2)
In schedule 5, part A, clause 4, tax code table, row 4, column 3, replace “$14,000”
with “$15,600”
.
(3)
In schedule 5, part A, clause 4, tax code table, row 4, column 3, replace “$48,000”
with “$53,500”
.
(4)
In schedule 5, part A, clause 4, tax code table, row 5, column 3, replace “$48,000”
with “$53,500”
.
(5)
In schedule 5, part A, clause 4, tax code table, row 5, column 3, replace “$70,000”
with “$78,100”
.
(6)
In schedule 5, part A, clause 4, tax code table, row 6, column 3, replace “$70,000”
with “$78,100”
.
32 Schedule 8 amended (Reporting of income information by individuals and treatment of certain amounts)
(1)
In schedule 8, part B, clause 2(4)(a), replace “$14,000”
with “$15,600”
.
(2)
In schedule 8, part B, clause 2(4)(b), replace “$14,000”
with “$15,600”
.
(3)
In schedule 8, part B, clause 2(4)(b), replace “$48,000”
with “$53,500”
.
(4)
In schedule 8, part B, clause 2(4)(c), replace “$48,000”
with “$53,500”
.
(5)
In schedule 8, part B, clause 2(4)(c), replace “$70,000”
with “$78,100”
.
(6)
In schedule 8, part B, clause 2(4)(d), replace “$70,000”
with “$78,100”
.
Part 4 Income Tax Act 2007 amendments commencing 1 April 2025
33 Income Tax Act 2007 amended
This Part amends the Income Tax Act 2007.
34 Section GB 27 amended (Attribution rule for income from personal services)
In section GB 27(2)(c), replace “$70,000”
with “$78,100”
.
35 Section RD 10 amended (Amounts of tax for PAYE income payments)
(1)
In section RD 10(2)(a), replace “$48,000”
with “$53,500”
.
(2)
In section RD 10(2)(b), replace “$70,000”
with “$78,100”
.
36 Section RD 17 amended (Payment of extra pay with other PAYE income payments)
(1)
In section RD 17(2)(a), replace “$14,000”
with “$15,600”
.
(2)
In section RD 17(2)(b), replace “$14,000”
with “$15,600”
.
(3)
In section RD 17(2)(b), replace “$48,000”
with “$53,500”
.
(4)
In section RD 17(2)(c), replace “$48,000”
with “$53,500”
.
(5)
In section RD 17(2)(c), replace “$70,000”
with “$78,100”
.
(6)
In section RD 17(2)(d), replace “$70,000”
with “$78,100”
.
(7)
Replace section RD 17(4)(c) with:
(c)
low threshold amount is, as applicable,—
(i)
for secondary code SB, $0:
(ii)
for secondary code S, $15,601:
(iii)
for secondary code SH, $53,501:
(iv)
for secondary code ST, $78,101:
(v)
for secondary code SA, $180,001.
37 Schedule 1 amended (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits)
(1)
Replace schedule 1, part A, table 1 with:
Table 1
| Row | Range of dollar in taxable income | Tax rate |
|---|---|---|
| 1 | $0 – $15,600 | 0.105 |
| 2 | $15,601 – $53,500 | 0.175 |
| 3 | $53,501 – $78,100 | 0.300 |
| 4 | $78,101 – $180,000 | 0.330 |
| 5 | $180,001 upwards | 0.390 |
| How to use this table: | ||
| Find the range in the second column for each dollar in the person’s taxable income, and apply the relevant rate for the dollar in the third column. | ||
(2)
Replace schedule 1, part C, table 1 with:
Table 1
| Row | Range of dollar in pay | Tax rate |
|---|---|---|
| 1 | $0 – $13,962 | 0.1173 |
| 2 | $13,963 – $45,230 | 0.2121 |
| 3 | $45,231 – $62,450 | 0.4286 |
| 4 | $62,451 – $130,723 | 0.4925 |
| 5 | $130,724 upwards | 0.6393 |
| How to use this table: | ||
| Find the range in the second column for each dollar in the person’s pay, and apply the relevant rate for the dollar in the third column. | ||
(3)
Replace schedule 1, part D, table 1 with:
Table 1
| Row | ESCT rate threshold amount | Tax rate |
|---|---|---|
| 1 | $0 – $18,720 | 0.105 |
| 2 | $18,721 – $64,200 | 0.175 |
| 3 | $64,201 – $93,720 | 0.300 |
| 4 | $93,721 – $216,000 | 0.330 |
| 5 | $216,001 upwards | 0.390 |
| How to use this table: | ||
| Find the range in the second column for the last dollar of the amount of the ESCT rate threshold amount, and apply the relevant rate in the third column. | ||
(4)
Subsections (1), (2), and (3) apply for the 2025–26 and later income years.
38 Schedule 2 amended (Basic tax rates for PAYE income payments)
(1)
In schedule 2, part B, table 1, row 2, replace “$14,000”
with “$15,600”
.
(2)
Subsection (1) applies for the 2025–26 and later income years.
39 Schedule 6 amended (Prescribed rates: PIE investments and retirement scheme contributions)
(1)
In schedule 6, table 1, row 4, column 2, paragraph (a), replace “$48,000”
with “$53,500”
.
(2)
In schedule 6, table 1, row 4, column 2, paragraph (b), replace “$70,000”
with “$78,100”
.
(3)
In schedule 6, table 1, row 6, column 2, paragraph (a), replace “$14,000”
with “$15,600”
.
(4)
In schedule 6, table 1, row 6, column 2, paragraph (b), replace “$48,000”
with “$53,500”
.
(5)
In schedule 6, table 2, row 2, column 2, replace “$70,000”
with “$78,100”
.
(6)
In schedule 6, table 2, row 3, column 2, replace “$48,000”
with “$53,500”
.
(7)
In schedule 6, table 2, row 3, column 2, replace “$70,000”
with “$78,100”
.
(8)
In schedule 6, table 2, row 4, column 2, replace “$14,000”
with “$15,600”
.
(9)
In schedule 6, table 2, row 4, column 2, replace “$48,000”
with “$53,500”
.
(10)
In schedule 6, table 2, row 5, column 2, replace “$14,000”
with “$15,600”
.
(11)
Subsections (1) to (10) apply for the 2025–26 and later income years.
Part 5 Other amendments
Amendments to Tax Administration Act 1994
40 Tax Administration Act 1994 amended
Sections 41 to 43 amend the Tax Administration Act 1994.
41 New section 33G inserted (Research and development tax credits: extension of time if approval corrected)
After section 33F, insert:
33G Research and development tax credits: extension of time if approval corrected
(1)
An extension of time is available for a person to file a supplementary return under section 33E if the person—
(a)
applies to the Commissioner under section 68CB(3C) or 68CC(4C); and
(b)
the Commissioner approves the person’s application.
(2)
The time for a person to file a supplementary return under subsection (1) is extended to the day that is 30 days after the Commissioner amends the approval.
42 Section 68CB amended (Research and development tax credits: general approval)
(1)
After section 68CB(3B), insert:
(3C)
Upon application, the Commissioner may amend an approval if—
(a)
the amendment is only to correct the name of the person named in the approval; and
(b)
both the person named in the original approval and the person applying for the amendment are members of the same wholly-owned group.
(2)
Subsection (1) applies for the 2021–22 and later income years.
43 Section 68CC amended (Research and development tax credits: greater than $2 million approval)
(1)
After section 68CC(4B), insert:
(4C)
Upon application, the Commissioner may amend an approval if—
(a)
the amendment is only to correct the name of the person named in the approval; and
(b)
both the person named in the original approval and the person applying for the amendment are members of the same wholly-owned group.
(2)
Subsection (1) applies for the 2021–22 and later income years.
Amendment to Student Loan Scheme Act 2011
44 Student Loan Scheme Act 2011 amended
(1)
This section amends the Student Loan Scheme Act 2011.
(2)
In section 4(1), definition of base interest rate, replace “0.74”
with “1.74”
.
(3)
In section 4(1), definition of base interest rate, replace “1.74”
with “0.74”
.
Legislative history
30 May 2024 |
Introduction (Bill 53–1), first reading, second reading, committee of the whole House, third reading |
|
4 June 2024 |
Royal assent |
This Act is administered by the Inland Revenue Department.